(Recasts with reaction from hedge fund)
Nov 27 (Reuters) - Deckers Outdoor Corp said on Monday it would appoint at least two independent directors by September 2018, but activist investor Marcato Capital Management said the move is not enough to ensure success of the footwear maker.
The company, whose brands include UGG boots, said the appointments will coincide with an equal number of retirements from the existing nine-member board of directors.
Marcato, which owns 8.4 percent of the company and wants to replace the entire board, said Deckers' announcement offers "too little, too late." In addition, the hedge fund said Deckers is acknowledging what Marcato itself has been saying for months: that new skills and insights are needed on the board.
Deckers said the new directors "are intended to increase Board diversity and reduce the average tenure of independent directors."
Tensions have mounted between the two sides for months and may be resolved only at Deckers' upcoming annual meeting, on Dec. 14, when shareholders vote on board nominees. Marcato has nominated a full slate of nine candidates to the board.
"The fact that this announcement comes just weeks before Deckers’ 2017 contested Annual Meeting further underscores the clear contempt the incumbent directors have towards the corporate governance process – once again doing as little as possible, at the slowest pace possible, and at the last moment possible," Marcato said in a statement.
San Francisco-based Marcato has urged Deckers to sell off pieces of the company, buy back shares and overhaul executive compensation. It has criticized Deckers for what it calls a lack of urgency in putting the company onto a path to success.
Marcato won a proxy contest at Buffalo Wild Wings earlier this year and boasts some of the strongest returns in the hedge fund industry this year, with its flagship portfolio returning 19 percent through the end of October.
But the strategy of trying to replace Decker's entire board may be risky, analysts said, noting that institutional investors are often willing to give management more time to repair problems and unwilling to throw out all directors.
Deckers stock closed down 2.0 percent at $72.42 on Monday. (Reporting by Gayathree Ganesan in Bengaluru and Svea Herbst-Bayliss in Boston; Editing by Savio D'Souza and Leslie Adler)